Securities Fraud

Posted in: Business and Finance 

There are a lot of ways to do the frauds with securities which you own, here I have gathered some examples about it. You should definitely see them.

Ways of fraud aimed at acquisition of securities

This could include the conclusion of fictitious trades to perform work. Work also carry one in this case has no plans, but this illusion is necessary to obtain payment for alleged work in the form of securities and their further assignment; theft uncertificated securities, theft of securities from the depositary, as well as the fraudulent acquisition of securities from the issuer through the provision of bogus receipts.


The fate of assigned securities may be different. For example, obtained by criminal means securities can be realized, and monies appropriated. In other cases acquired through fraud securities can be used to establish control over enterprises (shares).

Used and a scheme to transfer funds to the new owner. Criminals provide a fake transfer order, stamped and signed by the registered owner of the securities. Ordinance contains an indication of the transfer of uncertificated shares to the account specifically created for this organization (often ephemeral). Registrant meets the requirements of a transfer order, and securities are transferred to the account of the new owner. After that scammers sells obtained by criminal means shares and liquidate a legal entity, acts as a "new owner" of securities.

To commit the fraudulent theft of securities from the depositary criminals pre conclude any transaction. Knowing the details of the organization, placing securities depository and details of the securities themselves, they prepare a fake power of attorney to receive them from the depository. Presenting a fake passport and the letter, the fraudsters receive securities and subsequently sell them.

Ways of fraud aimed at taking money

Among the methods of securities fraud aimed at the seizure of cash, the most common was the realization of genuine securities not owned by criminals. Different ways crooks have at their disposal of securities, the legal owner of the lost or stolen from him. Then, the criminals are produced fake identification documents and law on securities and find a potential buyer. After that, seeming to legitimate owners of the securities, the criminals sell them, and the money appropriated.

Scams on the Internet

Anonymity, which provides its users with the Internet, the ability to reach a large audience, high speed and low cost distribution of information, compared with traditional means, make the Internet an extremely convenient tool for fraud. Here are some types of fraud, whether through a global network:
Scheme "to increase and drop" - the kind of market manipulation. Consists in extracting profits from the sale of overpriced securities, demand for which in turn was previously artificially formed. After the commission of such manipulations in the market price returns to the original level, and ordinary investors are at a loss;
Scheme "safe" investment of capital - via the Internet subject to investment deals with low risk and high profits. Usually, it offers non-existent, but very popular projects;
'Exotic' offers - for example, the proliferation of offerings by the Costa Rican coconut plantation;
fraud with banks. Scammers, being covered with the names and guarantees well-known and reputable financial institutions that offer investors to make investment of money;
Unreliable information - investors are misleading misinformation, exaggerated growth prospects of companies whose securities are being offered.
Concealment of earnings
Customers who sell their securities through a broker of the bank, often do not compare the interest income cited in the sale of securities received from the broker's bank with a market quotation of these securities on the date of sale. In a report on the sale of securities, the real price might be understated, which provides personal income, are often drawn up for the third company in the form of fees for mediation.

This type of fraud is found not only in the sale of securities clients, but also upon their acquisition. Then in the statement of purchase price of the securities is higher than the actual exchange rate.

Replacement of depreciated securities
The essence of the reception is the substitution of the bank of its securities, lost a high return on securities held by the bank. Of course, it is necessary to amend the register of securities of the bank, but if the worker himself, his wheeler-dealer and maintains, the problems with it does not arise.